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    Highlights—April 14, 2007

  • Yahoo! message board post: New Health Care Retirement Account - Do employees understand it? By "soft_ball_mom22". Full excerpt: I was one of the employees that 'had' to take the new cash balance retirement account. Had 17 years with the company but was 'only' 39. My retirement account - with 25 years this year - is only 1.5 times my yearly salary! If that isn't shameful enough - SO many people don't understand the huge impact that the New Retirement Health Care account will have on us in retirement.
    Rules -
    • IBM puts $2,500 a year into a Retirement Health Care Account (RHCA) for 10 years between the ages of 40 and 50
    • If you don't 'Retire' from IBM you don't get the money
    • You can't use the RHCA for any other Health Care plans except theirs.
    So when you either have 30 years or you are 55 and you 'retire' from IBM you can then draw from this $25,000 + interest RHCA account. Now what they don't make clear (basically this was pork slipped in the bill and meant to be overshadowed by the pension issue - which worked perfectly) is that in retirement you then choose to withdraw from your RHCA the monthly premium for the Health Care plan you chose - but you don't pay the amount you pay as am employee - because that is subsidized about 60-70% by IBM. Lets say as an employee you pay $300 a month for a family HMO plan. In retirement you would pay the unsubsidized amount - i.e. between $800-$1,000 a month depending on your plan - because we will be retirees and they will no longer be subsidized.
    So to be least conservative (let's say you have a plan that is $600 a month for you and your spouse) and let's say your RHCA grew to $30,000. Your IBM RHCA would last 4.16 years and then it would be gone. That is if you drew 100% from your account. Of course you could subsidize and only draw 50% of the monthly premium from your RHCA and take the other $300.00 a month out of your measly IBM retirement pay - which will put you that much more into poverty. I guess the plan is for us to be on Medicaid or have to work at other jobs until we can get Retirement Health Care from there?
    Would love to hear from anyone that is actually using this system today - I want to know if I understand these rules correctly.
    What I think is even more sad is how IBM has kept this issue SO quiet that people who don't understand what they are in for in retirement will be very surprised when they actually try to retire.
    What a shame that IBM'ers will be in VA hospitals and on Medicaid because they thought working for and retiring from IBM would take care of there retirement and health care in old age.
  • "Re: New Health Care Retirement Account - Do employees understand it?" by "madinpok". Full excerpt: You've got it pretty much correct. The FHA won't go very far towards covering your medical insurance costs. If you use it to pay 100% of the annual cost, it will only last about 2 years for Employee+Spouse coverage.
    This year, the cost of employee+spouse for the Low Deducible PPO plan plus Dental Plus is over $16,000 per year. Employee-only coverage is half that, or $8000.
    These rates are significantly higher than the active employee rates available under COBRA. The reason is that retirees are in a different insurance pool from healthy, active employees. So one way to reduce your costs for a short time is to take COBRA insurance for the first 18 months after you retire and then switch to using the FHA account. You'll have to pay the COBRA costs out of your own pocket since the FHA account can't be used for COBRA. But you will be spending your own money eventually anyway, so you may want to take advantage of the cheaper COBRA rates while you can.
    Last year, Fidelity estimated that future retirees should plan on spending $200,000 for medical costs during retirement. This year, they increased it to $215,000 based on the 7.5% increase in medical costs over the last year. They expect costs to increase this way for the foreseeable future.
    Finally, there were a few people who realized back in 1999 that IBM was giving us a raw deal with the medical changes and they said so on the IBM Pension and other Yahoo boards. "fhawontcutit" was one of them. Unfortunately, the word didn't spread far enough.
    It's just like the actuaries caught on tape said. The employees are usually happy until it comes time to retire and they realize how little they are going to get.
  • "Re: New Health Care Retirement Account - Do employees understand it?" by Kathi Cooper. Full excerpt: I have been on the FHA since I retired at age 55, July 1, 2005. This year, I pay $636 a month for medical, $32.96 for dental, and $9.64 for vision, for a total of $679.17 a month or $8150.04 per year. (one person, just me) 8,150 - Annual premium 507 - Deductible 3,042 - Out of pocket maximum 20% - of all services 35% - pay on drugs.
  • "Re: [IBM Employee Issues] New Health Care Retirement Account - Do employees understand it?" by Janet Krueger. Full excerpt: You forgot a key exposure with the FHA. You never vest in it, so IBM has no legal obligation to actually provide it or continue to promise it. And they don't have any money in trust set aside to fund it -- they are crediting virtual dollars to a fictional account. In the future, you may be able to use those dollars at the company store to buy whatever insurance IBM chooses to provide for whatever they choose to charge.
    Of course, they may not need to eliminate the vaporous accounts, as it looks like fewer and fewer employees will be allowed to work until they turn 55. Sad. )-;
    So when will employees start lobbying for Universal Health Care so they don't have to depend what remains of IBM's largesse?
  • "Re: New Health Care Retirement Account - Do employees understand it?" by "alwaysontheroad4bigblue". Full excerpt: If I remember correctly, that Fidelity estimate was for a person retiring at age 65 and Medicare eligible...in other words, the additional cost beyond Medicare for medical costs. Before Medicare kicks in, or course, the costs would be substantially higher.
    The FHA, of course, is a far cry from the promises of life-time free medical insurance that we old timers heard from our management back in the 70's, 80's, and before.
  • "Re: [IBM Employee Issues] New Health Care Retirement Account - Do employees understand it?" by Bob Sutton. Full excerpt: This article by the Alliance@IBM has multiple examples of what you face using the FHA; you can draw on it when you are eligible for full retirement which includes 30 years of service regardless of age.
    Now factor in when you exhaust your FHA benefits prior to Medicare and have to go to a private insurer like Humana the biggest one currently. http://www.healthinsurancesort.com/health-plans/humana.htm
    You can call them and describe your situation and get estimates using assumptions of your future condition however if you have a "pre-existing" condition like diabetes or cancer you will not be able to get insurance from them or anybody else unless you can find an insurer who will charge you anywhere from 24k to 36k in current dollars/yr. What it will be in the future is any body's guess.
    IBM and its executive greed will and is actually contributing to the early and premature deaths of IBMers right now and in the future. This and other broken promises will probably lead to some form of national health insurance in the future but it will too late for many IBMers stabbed in the back by these execs who are nothing short of being actual legal assassins with our current jurisprudence system.
  • "Re: [IBM Employee Issues] New Health Care Retirement Account - Do employees understand it?" by Janet Krueger. Excerpts: For purposes of retirement planning, I would strongly recommend you NOT plan on the FHA. You are not vested in it. IBM has not set aside any funding for it. IBM can remove it any time and you would have no legal recourse to force them to provide it. IBM can also lay you off 2 days before you qualify for it, and again you would have no legal recourse for receiving nothing. Lastly, prices on the insurance provided through the account, *IF* IBM continues to provide it, have no ceiling and are not regulated. Any assumptions about what the prices will be in the future or about what types of coverage will be offered are based on vapor.
    Plan on nothing; if you are extremely lucky and can collect on FHA with coverage worth having, it will be gravy you can add to your other savings.
    Any other assumption is just as well-founded as the assertions oft-repeated here that you and your spouse can blissfully plan to stay in good health through your retirement years. You're way better off if your plan allows for unforeseen circumstances!
  • Associated Press, courtesy of Yahoo! News: India high-tech industry out of workers. By Tim Sullivan. Excerpts: At the heart of the sprawling corporate campus, in a hilltop building overlooking the immaculately shorn lawns, the sports fields and the hypermodern theater complex, young engineers crowd into a classroom. They are India's best and brightest, with stellar grades that launched them into a high-tech industry growing at more than 25 percent annually. And their topic of the day? Basic telephone skills.
    Hello?" one young man says nervously, holding his hand to his ear like a phone. "Hello? I'd like to leave a message for Number 17. Can I do that?" Nearly two decades into India's phenomenal growth as an international center for high technology, the industry has a problem: It's running out of workers.
    There may be a lot of potential — Indian schools churn out 400,000 new engineers, the core of the high-tech industry, every year — but as few as 100,000 are actually ready to join the job world, experts say. Instead, graduates are leaving universities that are mired in theory classes, and sometimes so poorly funded they don't have computer labs. Even students from the best colleges can be dulled by cram schools and left without the most basic communication skills, according to industry leaders. [...]
    Much of India's success rests on the fact that its legions of software programmers work for far less than those in the West — often for one-fourth the salary. If industry can't find enough workers to keep wages low, the companies that look to India for things like software development will turn to competitors, from Poland to the Philippines, and the entire industry could stumble. [...]
    IBM's technical skills programs reached well over 100,000 Indians last year, from children to university professors. At Tata Consultancy Services, measures range from a talent search as far afield as Uruguay to having executives teach university classes — all designed simply to make people employable. [...]
    India has technical institutes that seldom have electricity, and colleges with no computers. There are universities where professors seldom show up. Textbooks can be decades old. Even at the best schools — and the government-run Indian Institutes of Technology are among the world's most competitive, with top-level professors and elaborate facilities — there are problems.
    The brutal competition to get into these universities means ambitious students can spend a year or more in private cram schools, giving up everything to study full-time for the entrance exams. Instruction is by rote learning, and only test scores count.
    "Everything else is forgotten: the capacity to think, to write, to be logical, to get along with people," Pai said. The result is smart, well-educated people who can have trouble with such professional basics as working on a team or good phone manners. "The focus," he said, "is cram, cram, cram, cram."
  • The Economist: Hungry tiger, dancing elephant. How India is changing IBM's world. Excerpts: Last June IBM held its annual investors' day in the grounds of the Bangalore Palace, a fake Windsor Castle in India's equivalent of Silicon Valley. Big Blue pulled out all the stops to impress the 50 or so investors and Wall Street analysts who turned up, gathering 10,000 employees to hear speeches by the president of India, the country's leading telecoms entrepreneur and IBM's own boss, Sam Palmisano, all hosted by a Bollywood babe in a red sari. The annual investors' day is usually held in New York, though it once took place in faraway Boston. By going to Bangalore, the technology giant was sending a strong message. With 53,000 employees, India is now at the core of IBM's strategy. With other big developing countries, including China, Brazil and Russia, it is fast becoming the firm's centre of gravity. [...]
    At first IBM paid too much for Indian workers, adding heat to an already sizzling labour market. Now it is trying to attract and retain talent by offering training and a career path that leads up the corporate ladder. (IBM's Indian rivals counter by telling potential recruits that they offer better training and quicker career progression than an American company run out of Armonk, New York.) This is paying off. According to Sanford Bernstein, a research firm, IBM has already increased profit margins from its services business, thanks to the cost reductions it has made in India. [...]
    One important part of this is especially relevant to the threat posed by India. IBM is trying to write software that automates many of the activities companies now outsource. It has picked 17 industries, two of which, health care and insurance, are being primarily addressed by software engineers in India. Examples include software developed in IBM's research lab in Bangalore that tests the language skills of applicants for call-centre jobs, greatly reducing recruitment costs; and a mortgage-origination business, launched last week, which is designed to automate lending by building on technology and software from two recent acquisitions, Filenet and Palisades Technology Partners. When processes are automated in software, they become an “asset”, the firm says, in the sense that programs generate licence fees and can be reused with other customers. This solves at a stroke the difficulty matching the Indians in labour-intensive outsourcing.
  • In a Vault message board post, "Dose of Reality" comments on the Economist article. Full excerpt: While there are no real surprises in this article, it is notable in that someone actually had the political incorrectness to write and publish it.
    It hits on all the usual themes - rote learning over thinking/analysis skills, having to be taught how to be polite on the phone and in e-mail correspondence, the fragment that tech represents as a percentage of the country, leaving the at large community in poverty, and the fact that the tech resources are only as relatively competent as they are because they are skimmed from the far right tail in the distribution.
    They seem to imply that it is the educational infrastructure that is putting a cap on the number of qualified resources that they can churn out every year. That is a rather weak argument, since there are no structural barriers to building it. The fundamental issue that they are bumping against is the limitation of human raw material. There was a market anomaly that corresponded to the tech bubble of the last decade, to which they were able to supply their best and brightest to service the lower-middle part of the value chain. The problem is that there is a structural limitation to how many resources they can supply on an ongoing basis.
    The competitive value that they offered with the skimming of the top .0x% of the talent pool was dubious at 25% of western wage rates. Now, the competitive value that they can offer with the broader skimming of the top .x% is going to be even worse at 40% of western wage rates. There's no fighting that good old fashioned invisible hand of Adam Smith.
    On a lighter note, I did find the name of the learning center (Mysore) to be a very fitting name!
  • Tampa Bay On-Line: Colleges Fight Job 'Offshoring'. By Cliff McBride. Excerpt: Kaushal Chari, the head of an information technology department at the University of South Florida, finds himself in an unusual role these days: public relations person. Like many computer schools, his Information Systems and Decision Sciences Department has been hit hard by students' fears of "offshoring" and the related offshore outsourcing. Where his department once awarded 350 bachelor's and master's degrees in management information systems, it now graduates about 150.
  • Society for Human Resource Management (SHRM): IBM's HR Takes a Risk. With a $100 million restructuring effort, HR at IBM has a lot to prove—and it relishes the challenge. By Robert J. Grossman. Full excerpt: When Sam Palmisano took over as IBM's chairman and CEO in 2003, the worst was over. His predecessor, Lou Gerstner, handed over a company in much better financial shape than it was in 1993 when Gerstner took the helm and the company was nearing bankruptcy.
    With solid financial footing, Palmisano was able to focus on his vision for IBM, the company where he spent his entire career. Palmisano set out to re-create IBM as a globally integrated enterprise that broke away from the pack on the strength of its human capital—not solely on its portfolio of products.
    When Palmisano announced his signature Business Transformation initiative, he called for IBM to establish an "on demand" global supply chain that provides customers with IBM products and services—software, hardware, business processing, consulting and more—wherever and whenever they need it. He then eliminated layers of management bureaucracy and moved the workforce closer to its global clients so that the company could compete on service delivery. Today, under Palmisano, the IT giant generates more than $90 billion in revenues. With 330,000 employees, it is among the 15 largest publicly traded companies in the world.
    Central to its resurgence is IBM's recognition that human capital is its most distinctive and manageable asset. Companies that rely on technological or manufacturing innovation alone cannot expect to dominate their markets indefinitely. Competitors can and do catch up. The quality and strategic deployment of talent is what separates winners from the also-rans.
    That's why Palmisano chose to center IBM's business strategy on the belief that its people are, and will continue to be, IBM's key market differentiator. HR and talent management—not computers—are IBM's core business.
    MacDonald's Influence. Before taking the senior vice president of HR position at IBM in 2000, Randy MacDonald was executive vice president of HR and administration at GTE (now Verizon Communications). Today, he oversees a globally integrated HR operation with 3,200 HR staff. His budget tops out at $1.3 billion. He reports directly to Sam Palmisano, IBM's chairman and CEO, and is a vocal member of the 13-person Operating Team that meets regularly with Palmisano.
    MacDonald also created and co-leads with CFO Mark Loughridge a 62-member Performance Team made up of the managers from all IBM major business units. The team meets for two days after the company issues its quarterly financial reports to discuss the performance of business units, examine successes and dissect failures, and look for human capital solutions.
    Early in his career, MacDonald realized that the door to the executive suite opens for people who have meaningful metrics at their fingertips. CFOs get in to see the CEO faster than HR because of data. "HR has to do the same," MacDonald says. "We have to offer quantitative metrics to the CEO and line people as to what's going on in their businesses," such as time-to-fill metrics, the conversion rate of summer interns to full-time employees and the attrition statistics for high-potential workers.
    When MacDonald needed $100 million to restructure HR operations, he had to persuade the C-suite that it was a good investment. "Do you think I can walk into the [office of the] CEO or CFO and ask for $100 million because I went to St. Francis College and I'm a good guy? I told them, 'I'm going to deliver talent to you that's skilled and on time and ready to be deployed. I will be able to measure these skills, tell you what skills we have, what [skills] we don't have [and] then show you how to fill the gaps or enhance our training.' "
    He is equally demanding of his HR team. MacDonald signs off on activities and projects only if they're embedded with metrics and ways to measure success. "It's all about execution and accountability; you have to deliver," he says. "And you demonstrate your success with metrics that businesspeople can understand."
    He is equally demanding of his HR team. MacDonald signs off on activities and projects only if they're embedded with metrics and ways to measure success. "It's all about execution and accountability; you have to deliver," he says. "And you demonstrate your success with metrics that businesspeople can understand."
    HR at Center Stage. As a result of Palmisano's initiative, HR finds itself in the spotlight. No need to fight for a seat at the table. No struggle to convince line executives that HR should be their business partner. HR's job is to deliver the people, to establish a ready supply chain of talent that will outperform the competition from top to bottom, from the executive suite to the factory floor. Palmisano has made it clear that if the company begins to lose revenue or market share, HR's piece of the responsibility will come from not delivering the right people to the right jobs at the right time.
    The game is not for the faint of heart. When IBM wins, HR gets to share the champagne; if the company loses, HR's head is on the block. In this case, the head belongs to Randy MacDonald, senior vice president of HR. A seasoned HR executive, MacDonald has Palmisano's ear and the respect of his fellow executives in the C-suite. His fingerprints are all over the key strategic and operational decisions of the corporation. "They know Randy can cut costs, fire people, call a spade a spade. He has a history in the way" he has stood up to union drives and taken criticism for IBM's cuts in pensions and other benefits for retirees, says Fred Foulkes, professor and director of the Human Resources Policy Institute at Boston University School of Management.
    His success has earned him the confidence at the top level. "The more success you have, the more license you're granted," Foulkes explains. MacDonald has taken that license and run with it. Foulkes says IBM's HR operation and MacDonald's business orientation are cutting-edge. "Clearly a leader like Randy has enormous impact," he says. "He is among this generation's top HR leaders." (For more information on MacDonald, see " MacDonald's Influence".)
    Now, MacDonald is taking a big risk. He's gambling on a radical HR restructuring that must pan out for IBM to continue as a market leader. "I don't mean to be arrogant about it, but this is leading-edge," he claims. "My team is doing things in the 21st century that nobody else has done. It's the wave of the future."
    HR's Strategic Gamble. Keeping the human capital supply flowing wherever it's needed is a daunting undertaking, one that MacDonald says is discussed in general HR circles but until now has not been done. The challenge led him to rethink the way HR delivers services. He says typical HR organizations operate out of silos—talent, learning, employee relations, benefits, diversity—a structure that's ineffective and inefficient. "Blow it all up is my attitude. Don't think about silos; think about end-to-end process."
    True to his word, in December, MacDonald announced a worldwide, $100 million reorganization of HR, the Workplace Management Initiative (WMI), which segmented the 330,000 employees into a layer cake of three customer sets. One layer consists of executive and technical resources, another holds managerial talent, and the third is rank-and-file employees.
    Separate cross-functional HR teams serve each layer. By the end of this year, MacDonald says, "We'll manage each person within each group as an asset and develop them accordingly. You'll have talent, learning and compensation people all managing people within their assigned levels." MacDonald says it's his responsibility to challenge the business plans of each unit in IBM. "If I look at a three-year plan and it says we're going to enter new markets, I have to decide what skills we'll need three years from now to compete in these markets. I have to look at what existing skills I have that will become obsolete."
    Using metrics, MacDonald already knows his workforce breakdown. "In three years, 22 percent of our workforce will have obsolete skills. Of the 22 percent, 85 percent have fundamental competencies that we can build on to get them ready for skills we'll need years from now." The remaining 15 percent will either self-select out of IBM or be let go.
    Roles and Skill Sets. No one at IBM is safe from being in that obsolete category. Everyone from top to bottom will be assessed and reassessed on their competency levels and placed where IBM needs them—whether it be in the United States, India or anywhere else IBM expands in the future. Those who are lacking necessary competencies will have the opportunity to be trained if they can and want to be.
    Under WMI, every role that workers, managers and executives play—490 in all—has been identified and defined. All IBM employees play at least one role, sometimes two, maybe even three. (For example, Ted Hoff, vice president for learning, is a learning leader and a manager.) Internal analysts studied what people do in each role and determined the functional expertise or skill sets that the roles require in each job. There are 4,000 skill sets, all closely defined and measurable, and monitored by MacDonald and his HR team.
    By the end of this year, each employee will have conducted a self-assessment and reviewed it with his or her manager to discuss the level of mastery the worker has achieved in each skill set. "The manager will be sitting with a checklist of skills that you'll need for your job," Hoff explains. "This will provide precision about performance and also will offer a road map as to how we've developed each person. We're not measuring how well you perform on a written test. We're measuring how you've demonstrated mastery in each skill set through your performance."
    Ratings are made on a continuum from zero to three:
    • Zero—You have not demonstrated a significant mastery of the skill set.
    • One—You have demonstrated acquired knowledge, understand what's needed in the role and understand the bottom-line results that are being sought. But you have not yet applied it in a demonstrated way.
    • Two—You have done something around the skill set that shows you have a level of mastery that has been applied.
    • Three—You have achieved a mastery level demonstrated by the fact that you're not only proficient, but that you're developing others around it.
    Assessments in hand, employees will be told where they stand. "We'll tell you where we see your skill sets, which skills you have that will become obsolete and what jobs we anticipate will become available down the road," MacDonald says. "We'll direct you to training programs that will prepare you for the future."
    MacDonald says that the early warning system should be a morale booster. "People will sit back and say, 'I get this, you notified me. Now I've got time to do something about it.'
    Yet some people won't. "There's a segment that will choose to opt out; there's nothing I can do about it," he says. "There's a segment that can't get re-skilled; they don't have the intellectual capability or the drive to do it. But whatever happens, people will be able to decide for themselves. Three years from now, I can look people in the eye and say, 'We told you, but you didn't do it.' "
    The purpose of the ratings is so that MacDonald can easily locate who at IBM has the skill set needed for an open position anywhere in the world and fill it quickly. It will mean employees will have less security about what their job will be and where it will be in the future. But, because the overall IBM business strategy is to meet customers' demands wherever they are, the HR strategy has to follow.
    Performance Metrics. IBM's Vice President of Learning Ted Hoff points out that developing training metrics is a difficult intellectual exercise but worth the effort. "If you can figure out how to do them, they'll give you guidance about what's working and, equally important, they'll help you demonstrate your value. There are two challenges: 1) getting the goals clear and figuring out what metrics you can set against the goal, and 2) getting the data reasonably attainable and clean so you can do the measurements."
    The most reliable method is to have a participant group and a control group. But business units, eager to cash in on training, usually aren't interested in holding one group back as a control. Hoff cites a case, however, where a controlled study helped him prove his value when training IBM client executives. The training was offered through the Internet. Some leaders encouraged their client execs to tap into it; some did not. "We looked at the bottom-line performance of clusters of sales executives who took advantage of 15 online modules or more, vs. the clusters of executives who, on average, took advantage of five or less.
    "The results showed the executives who took 15 or more modules achieved a quota attainment of 107 percent over the quarter; those in the cluster with five or less achieved a quota of 94 percent. The quota attainment difference was worth over $500 million in revenue. Gross margin was 30 percent. The e-learning investment was $12 million. That's $150 million in gross margin against a learning investment of $12 million," says Hoff.
    Assembling the Team. To fulfill this strategy throughout the global company, MacDonald had to assemble an HR team that is truly business-oriented. Karen Calo, vice president for global talent in Armonk, N.Y., supervises team talent directors who are assigned to work with the managing directors of IBM's line units such as Global Technology Services (GTS) and Global Business Services.
    "The talent directors report to me but work directly with the business leader they're assigned to support," she says. "They do a lot of similar activities, helping to develop strategic and operations plans but in different contexts. If you're [a talent director] in Hardware, you may deal with issues relative to product life cycle; in a service business, you may be working on integrating solutions."
    The tie that binds all talent directors is knowledge of the individual business sectors. "If you are an HR person who doesn't understand the business you're supporting, you can't be successful," says Calo. "You don't necessarily need an HR degree; you can always learn HR. Deep subject-matter expertise is important in some areas like compensation. But from a generalist standpoint, some of our most interesting hires come from outside HR."
    In recruiting for HR, Calo says she's "intrigued by the business professional who really has been out there on the line who really understands the business, has good judgment and good common sense." Kari Barbar, vice president of learning, is an example. An experienced hardware engineer, Barbar, who is based in Research Triangle Park, N.C., recently transferred into HR to work directly with Mike Daniels, senior vice president of GTS in Somers, N.Y. "Five years ago, I would not have considered leaving hardware development to move to HR," she says. "But now, I see that our ability to develop expertise is what distinguishes IBM from its competitors. In HR, I'm involved in driving the transition of the company."
    Barbar's job is to determine the professional and technical skills that her client, Daniels, requires to grow GTS. She must provide both the selection of talent and training of existing talent and demonstrate to Daniels' satisfaction that she has delivered value.
    To help develop those skill sets across the board, last year, IBM spent more than $700 million training its workforce. Ninety-five percent of the funding came not from HR's budget, but from line managers' budgets. Putting the training line item on managers' budgets ensures that the training is connected to their business goals. At the end of the day, HR and MacDonald will have to produce evidence to the line managers who funded the training that it has helped to keep the pipeline flowing. (For more on how HR proves training's impact on the bottom line, see "Performance Metrics".)
    The pipeline also includes senior-level positions. Succession planning is a standing agenda item at Palmisano's monthly executive team meetings. Calo, Palmisano and his direct reports discuss the merits of candidates for any open senior-level position. "We present a diverse slate of candidates who can fill the role, describe the competencies they have and those that are required for the position," Calo says. "After discussion and consensus within the Operating Team members, the position is filled."
    Going for Broke. At this point, the rollout of WMI is just beginning and the jury is out on whether the new silo-less, integrated HR will make HR more effective. Even the usually confident MacDonald is uncertain. "This is the first time in my life I'm afraid," he says. "The restructuring is so radical." Still, he relishes his opportunity to run with the innovation. "I'm here to lead, not follow," he says.
    And he urges other HR executives to follow his example and step up. "I don't care if you're sitting on top at IBM or you're at a Fortune 1000 company. You are entrusted by the shareholders to protect the assets of the corporation that are human in nature. Don't worry about jargon like 'business partner.' You should be just like any other senior executive making a difference to your company.
  • In a Yahoo! message board post, "makeyourignorancework4u" comments on the SHRM article. Full excerpt: This strikes me HR's long awaited metastasis, the spread of HR cells to distant parts of the IBM employee body and the invasion of normal IBM working groups by HR cells. This is the hallmark of malignancy.
    HR is not taking a risk; quite the contrary, the patient is the one at risk. HR is a brutal profession as can easily be established simply by visiting your local HR "partner" and examining the plaques on the wall. The first one you are likely to see is one for "Outstanding Achievement in helping with this or that Resource Action". If you ever find one not in that category, you will have achieved more than Stanley did when he found Dr Livingstone in Africa. The only recognition you can expect in HR is if you "help employees leave IBM".
    The planned "skill profiling" detailed below will turn out for many to be merely a "popularity profile". There are simply too many superfluous human traits having nothing to do with productivity of efficiencies that will be funneled into soft skills such as "communication skills" etc. that will then be used to grease an employee's skids to provide the 3-5% attrition rate expected.
    My advice to employees whose skills are challenged is to immediately enroll in some classes in those areas... In particular, if your "communication" skills are called into question ...I highly recommend reading a book or two about "ingratiation" sometimes incorrectly referred to as "kissing ass". Just remember on of the following alternatives "If you don't kick it on the way up, you won't have to kiss it on your way down." or better yet "The moving finger writes, and having writ, moves on. And neither all your piety nor all your wit can ever recall a single line".
    It would also be wise to recognize that "lack of skill" in one way or another is the only "allowable" reason in IBM for termination. YMCA is the wrong song to counter this coming malignancy. CYA comes a lot closer....not matter who you are.
  • New York Times: More Nuggets on Pay From Proxy Filings. By Eric Dash. Excerpts: Many of the most interesting nuggets on executive pay are buried so deep in the new corporate filings that it helps to bring along a calculator and a shovel. The Securities and Exchange Commission’s new disclosure rules were supposed to make it easier for investors to understand how top managers were being paid. But piles of new data and proxy statements that are about as easy to parse as the federal tax code have even experts scratching their heads. [...]
    ¶International Business Machines will freeze this year an executive retention plan that helped bolster retirement benefits for Samuel J. Palmisano, its chairman and chief executive, to more than $33 million. On top of his $18.8 million pension, Mr. Palmisano is eligible to collect about $14.2 million through a special retention plan.
    In its proxy statement, I.B.M. said that it set up the program in 1995 to keep senior managers when the company’s “very existence” was at risk, but that the “original purpose had been met.”
    I.B.M. closed the program in 2004 for new participants, and said that by the end of the year, it would freeze the payments earned by any existing managers. An I.B.M spokesman could not be reached for comment about the timing.
  • New York Times: Income for Life? Sounds Good, but Do Your Homework. By Jan M. Rosen. Excerpts: WHAT if I outlive my money? The fear of such a thing happening haunts many older Americans. So when a reputable company, New York Life Insurance, teams up with AARP to offer an investment with the absolute promise of lifetime income, it can sound like an answered prayer.
    Indeed, the investment, an immediate annuity, may be ideal for some retirees, but financial advisers say it is not for everyone. Prospective buyers need to do some homework — studying both their own finances and the annuities available in comparison with other investments.
  • Wall Street Journal: Retirement Cuts Draw A Yawn From Many. Excerpts: During the past two years, 17% of workers have received cutbacks in workplace retirement benefits for themselves or their spouses, but only one-third of those affected have increased their savings in response, new research shows. Among those who had a retirement-benefit reduction, "a full 40% came out and said they were doing absolutely nothing" to compensate, says Jack VanDerhei, a professor at Temple University in Philadelphia and co-author of the Retirement Confidence Survey, scheduled for release today by the Employee Benefit Research Institute, a Washington nonprofit group, and others.
    Many workers appear to be counting on employer-provided benefits they are unlikely to receive; 62% of workers are expecting income from a defined-benefit pension, while 41% report they or their spouses currently are covered by such a plan, the research shows. Pension-plan changes by employers have left 45% of workers less confident than they were five years ago about the amount of money they can expect to receive from an employer-provided pension plan.
  • Wall Street Journal: Cubicle Culture. Not Even Politicians Can Out-Campaign Office Grandstanders. By Jared Sandberg. Excerpts: Ed Jackson could write a handbook on self-promotion based on his observations over his career. It would include small tactics, such as taking copious notes during management meetings to appear diligent. "Make sure you use a pencil so the scribble is more audible," says the marketing consultant. And it would include larger tactical maneuvers, such as moving on to another job or project before a failure surfaces. "Isn't that exactly what politicians do?" he asks.
    Most of his advice for getting ahead would involve actions in public forums: meetings, emails and teleconferences. Copy the boss liberally, for example, and email only late in the evening to suggest you haven't left work yet, he says. During meetings, ask questions after your boss's presentation that reinforce the stated position, such as "Wouldn't you agree that … ?" And always pose questions at the end of a colleague's argument that suggest he's somewhat daft: "You're saying what exactly?"
  • Seeking Alpha: Circuit City: Layoffs Unlikely To Boost Bottom Line. By David Phillips. Excerpts: 'Wage Management'. The Company also announced a 'wage management' initiative under which approximately 3,400 store employees, or about eight percent of the work force, were notified on March 28, 2007 of their planned termination. The separations were effective immediately and were the result of a Company analysis, which identified employees who were paid well above the market-based salary range for their role.
    According to an article in The New York Times, the laid-off Circuit City employees worked in the company’s stores and warehouses, selling electronics, unloading boxes and the like. Management recently said that about 60% of those associates were in customer-facing positions. They generally earned $10 to $20 an hour, making them typical of the broad middle of the American work force. Nationwide, the median hourly wage of all workers is about $15.
    As a result of the "wage management" (forget the euphemism, call it what it is—the gutting of higher-paid workers), the Company expects to record pretax expenses in the fourth quarter of fiscal 2007, totaling $9.9 million, related to the termination of these workers and their post-employment benefits. [...]
    How Much Will It Really Help? In our view, save for slowing the downward pressure on the Company’s stock price, we look for the “intangible”—employee morale--to adversely impact the tangible—sales productivity. Just how much will kicking loyal employees to the curb actually help the bottom-line?
    Assuming that each displaced worker formerly made $15 an hour, multiply by a 40-hour week, and the Company paid out $31,200 per annum to each worker (excluding health/retirement expenses), or $106.1 million annually to all 3,400 workers. Rehire 3,400 at $10 per hour, and the nominal cost is $70.7 million (excluding health/retirement benefits). The effective after-tax savings (36%) would approximate $22.7 million per year. Anyone who has ever bought goods from Circuit City knows that it is
    Anyone who has ever bought goods from Circuit City knows that it is the experienced sales persons that can unctuously get you to buy “Peace of Mind” with the Circuit City Advantage Protection plans. In the last twelve-months, net sales from these extended warranties were about 4.0 percent of domestic segment sales, or approximately $440.0 million! Now tell us again, Mr. Schoonover, how a customer-centric operating model will benefit from the loss of tenured sales persons?
    In connection with his retirement (as Chairman) from the Company in July 2006, Mr. W. Alan McCollough forfeited his performance-accelerated and time-based restricted stock awards. This did not include, however, vested –and exercisable—stock grants worth an estimated $76.6 million. In addition, on December 22, 2005, he also elected to receive a lump-sum payment—in lieu of annual pension benefit payments—of $4.42 million. If Circuit City were serious on delivering an improvement in SG&A margins, would it hurt for management to lead by example?
  • Yahoo! message board post: "The H-P Way" by "boulderman66". Full excerpt: Mark Hurd was quoted by the WSJ as saying: "It's the little things that matter. For example, we recently redid our pension plan -- and we got a big financial gain out of it. A lot of money. Well, we turned right around and gave it back to the employees in an early retirement program. I'm not saying another company wouldn't do that, but it is certainly something that H-P would do."
    Also: when asked why, after the great quarterly revenues announcement, H-P didn't also trumpet the fact that it has passed IBM as the largest information company in the world, perhaps in history, Mr. Hurd replies, "I don't think it's H-P style to go out and talk about that. Our history is to talk about technology. What we do for customers. The revenues are just the result. So we consciously decided that wasn't something that needed to be brought up."
  • Legal Times: High Court May Consider IBM Worker's Claim of Race-Based Retaliation. Ex-employee says he was penalized and later fired for complaining about racist workplace remark. Excerpt: In October 2002, petitioner Robert Jordan was watching a news report on the capture of the two Washington-area snipers with a co-worker, Jay Farjah, at an IBM work site in Maryland. Farjah made a crude racial slur regarding the snipers, who were African-American, in the presence of Jordan, who is also African-American. Offended, Jordan reported the slur to both IBM management and supervisors at Alternative Resources Corp., which employed him jointly with IBM. Over the next month, his IBM supervisors changed Jordan's work schedule and gave him additional assignments; an ARC manager eventually fired him.
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Kaiser Network: Physicians Oppose UnitedHealth Group Policy To Fine Them for Out-of-Network Referrals. Excerpts: Many physicians are voicing opposition to a new UnitedHealth Group policy that threatens to fine doctors who repeatedly refer patients to out-of-network laboratories for tests, the Wall Street Journal reports. UnitedHealth in 2006 reached a 10-year deal to make Laboratory Corporation of America Holdings the insurer's national in-network laboratory. "To squeeze as much savings as possible out of the LabCorp deal, UnitedHealth sent a not-so-friendly reminder to doctors to play along," the Journal reports. The letter states that as of March 1, UnitedHealth will reserve the right to fine physicians $50, cut their fees or eliminate them from the UnitedHealth network if they consistently refer patients to out-of-network labs. The insurer has not yet imposed any financial sanctions. According to the American Medical Association, the policy marks the first time that physicians face fines for referring patients for out-of-network care or testing.

New on the Alliance@IBM Site:

  • From the Job Cuts Status & Comments page
    • Comment 04/9/07: "Can anyone comment on severance (or lack of) being given to employees being LEANed out of the business? ". Rumor has it that you will be forced to a Center of Competency. These centers are not necessarily your local IBM office. For example the Center of Competency for Storage will either be in Boulder or South Charleston. If you can't co-locate to one of these physical locations, you only have one other option..... Quit. This way you will get no separation package and IBM does not need to tell any outside sources about this. Basically, they figured out how to do a Resource Action in such a way that they don't have to tell any outside sources, thus increasing the bottom line while still looking good to the consumer. Pretty underhanded huh? -Anonymous-
    • Comment 04/11/07: Regarding this LEAN program: Do I understand correctly that IBM will not offer a moving allowance to employees who are reassigned to another location? -Thunk-
    • Comment 04/11/07: Thunk- It is a co-location program. This means you will be required to be onsite Monday-Thursday and will be flying Sundays and Fridays. LEAN starts April 17th in the AHS org. There was a big, last minute all-hands meeting about it this morning. On the call, they did say the co-location plans are not long term, but could be in the near future. Co-location is not relocation. Relocation would imply that IBM would reimburse employees some expense. Co-location is that IBM flys you to wherever and flys you home for the weekends, and if you don't like it, you are free to find a new job. Looks like they are also changing job descriptions to enforce this as well. Therefore, if you can't meet your job description, you will be forced to quit so IBM does not have to pay severance, etc. -Anonymous-
    • Comment 04/11/07: I heard from one team today about 150 of their SA's have to go to Raleigh Monday for LEAN training mandatory whether they can go or not. LEAN is now everywhere. I heard from a second line today on the LEAN team that there will be 40% cuts to IBM'ers on May 1. Get out if you can. We are done this year. -WeRScrewedNow-
    • Comment 04/11/07: I heard the LEAN acronym is for 'Let's Eliminate All North Americans -O Sammy Boy-
    • Comment 04/12/07: So what happens if they relocate you to a Centre of Competency and you say "no thank you". I assume they have to lay you off at some point. Is it legal to "dismiss with cause" because you refuse to move 1000 miles away, or would they have to lay you off? I can't imagine anyone but the young/single being able to pick up and move. This seems like a very convoluted way of doing layoffs. -Anonymous- Alliance reply: IBM employees are "at will" employees. IBM can and probably will consider your refusal to relocate as you quitting the company.
    • Comment 04/12/07: I can confirm that there will be no moving allowances for LEAN. You will be told "Your job is now in Raleigh. I understand your job is currently 150 miles from Raleigh. If you move to Raleigh, you'll have a job when you get there, but I can't help." It will then be implied to you that if you can't move to Raleigh, you should just quit.
      DON'T! Just hold your ground, because I can also confirm that there IS going to be a separation package. In fact, the fastest way to get it is to tell your first line, as soon as you hear the sentence above, that "I'm sorry, I can do my job here, but I will be unable to move." First lines are being told to put anyone who says something like this at the top of their RA lists.
      If you want to keep your IBM job, though, yeah, you've got to move -- on your own dime -- to where the job is going to be after LEAN. One final thing: the LEAN associates are being told "money is no object" for incidental expenses during the LEAN transitions, so ask your manager for daily mileage to Raleigh, hotel rooms there, and all sorts of other incidental expenses during the pilot. If you can make any sort of coherent case at all, you'll get the money. Good luck, everyone. -TickedoffFirstline-
    • Comment 04/12/07: So, LEAN looks like Global Services (or whatever they are called now). They fly out to some customer location every Sunday night and return home on Friday night. The customer pays the expenses, though, not IBM. It seems to me that weekly airline commuting plus meals and hotel would soon equal the cost of a move. Can someone please explain the reason given for doing this? For example, what kind of work is involved? Why can't this work be done remotely? (Perhaps that will be obvious when the kind of work is known.) What is it about LEAN that requires training? I'm assuming that one would be doing the same work in the consolidated location. -Thunk-
    • Comment 04/13/07: One more thing to consider about LEAN. Even if you relocate to the so called competency center. what will prevent them from offshoring the work and laying you off. Don't fall for the concept of LEAN. These people are downright evil. -Anonymous-
    • Comment 04/13/07: Here's a useful little datum: if/when you leave IBM, you are entitled to take all the flex spending you have budgeted for the year, in advance. In fact you can take it all after your first contribution of the year (e.g.: Jan 15). It's an IRS rule which I just successfully tested. -Anonymous-
    • Comment 04/14/07: to the anonymous appender on 4/13/2007 about the flexible spending account .. How do you do this? When I left IBM they SCREWED me out of a sizable chunk of this account by giving me misinformation on date submission deadlines. How do I get it back? -Ask413Anon-
    • Comment 04/14/07: To clarify, I was referring to the medical flex-spending account, the one you can use to get reimbursement for co-pays, uninsured medical/dental/optometry costs, etc... You MUST have bills for stuff on/before your last day. I think you can submit the bills for some time after that, but the cost must actually be incurred before you leave. To be safe, I faxed my claim in on my last day. This benefit is part of your pay, it isn't your money that gets stashed away (like dependent care). In exchange for some portion (XXX) of your base pay, they offer a flexible spending plan that covers up to XXX for the year. That is why you can claim the whole benefit in january, but you can't make claims for costs after you leave, and the company gets to keep whatever you "put in" but didn't spend. Understandably, employers don't widely advertise this. Wikipedia has a very good page on this. -Anonymous-
  • From the General Visitor's Comment page:
    • Comment 04/7/07: IBM does believe in slavery of course, they've just put down the leather whip and replaced it with a financial whip. Does anyone think a visa worker who can be sent home after coming over here and renting an apartment, and everything else would dare say no about anything knowing they could be sent packing while on the hook for everything they've bought to get here? "Now iBM wants to dump iBm employees in India because of their high pay and hire workers in Vietnam because of their lower pay! As predicted. If iBm could use slaves they would.. I wonder if workers in India will be so willing to train their Vietnam replacements! I doubt they will and now iBm will start to pay the price for betraying employees, around the world" -ibm-loves-slavery-
    • Comment 04/7/07: IBM...the once great icon. Now, the great stench morphed by corporate greed. As a 15 year employee, no longer, its a crying shame to see what has happened over the last 15-20 years. The Watson days were wonderful where the employee was fostered and respected. Today, may Sam rot and stink up the abyss of Satan's domicile. As for the pension plan, buy me out so I can mark you down as a has been of no further concern. -Anonymous-
    • Comment 04/8/07: I am like a lot of long term people here. I despise IBM and its management. Its like being trapped in a bad marriage. IBM would love to get rid of me, but India et al hasn't yet learned enough to replace me (its only a matter of time). I need to make it to retirement, I can't move my family, and no other company will hire me in my 50's. One problem is that too many of us still want to believe that we are part of IBM. We aren't. Its NOT a family, its NOT a career, it doesn't love us. It is organized for the pleasure and financial support of a handful of executives.
      Stop trying to find love in your job. They stole our pensions, health benefits, retirement benefits, raises, and self respect. To hell with them. My plan is simple. I will get back some of what they stole from me, legally. I will maintain a 1 or 2+ rating and smile in their faces, I will never complain.
      Once I am ready to retire I will simply stop working. I am a mobile employee, it'll take them six months to a year to discover that I've stopped working (or at least am doing the absolute minimum). After that it'll take them another six months to go through the process of firing me. If I file retirement papers when they start, effective months ahead a stupid manager will usually not put you on an improvement plan. Then rescind the retirement papers. I can play this out for 1-3 years depending on how dumb my manager at the time will be.
      At band 10 rates this should be worth 200-600K dollars. They owe me that much for the benefits they stole and all the unpaid overtime over the years. I consider this recovering my deferred compensation. To hell with Sam, Lou, and the rest of them. I can be as manipulative as any of them, and I know the IBM paperwork shuffle better than they do. -Ironman-
    • Comment 04/9/07: Every IBM'er needs to play the HR GAME...go out to your personal skills and mark every single item at the highest level...This should really screw IBM HR up, since they can't fire you if you have the skills to do your job.
    • Comment 04/9/07: The new HR scheme is not anything new. I saw IBM rate everyone's skills in the early 90's. Then change the appraisal system to PBC. Here you go again and Randy MacD is just using a version of a old HR plan, that rates workers before massive layoffs, like IBM did in the 90's! Remember? If you were not with IBM in the 90's this seems new but is not. It the dark before the layoff storm! Randy also, seems to be borrowing from his HR experience managing union workers with the new IBM appraisal system. Unions often rate workers based on experience and skill so that people that make a level, are proficient enough for the job and salary level... Randy has not invented anything new here. He's falling back on his experience work with union shops... so why not form a union at IBM and make Randy more at home? -WhatsNewHere-
    • Comment 04/9/07: Rumors at east fishkill plant that a big layoff is coming. Building 323 is a major target, this came from a good source close to upper management. -Anonymous-
  • Pension Comments page
    • Comment 04/3/07: There is a rumor going around RTP that anyone on the OLD plan if not retired by 2009 will be converted to the new plan. Can anyone (Alliance) substantiate this? Seems to me if that is true they would be inundated with lawsuits! -FedUp-
      Alliance Reply: The OLD plan is being frozen. The NEW plan is being frozen. IBM has already announced that. Anyone still working at IBM after the freeze will not be accruing any additional pension benefits for their labor. If they choose to continue working, and are allowed to do so, they should be maxing out their 401K (TDSP) contributions, as that is the only way they can increase their retirement income.
      Any vested accruals in the OLD plan are fully protected by federal ERISA law. IBM cannot take them away. The worst IBM could do in 2009 is terminate the pension plan entirely (that is the only legal way they have to get their greedy hands on the excess $$ in the pension fund). If they do that, they have to purchase annuities for all employees on the OLD plan equivalent to what they could receive if the fund were not terminated.
      Seems to me like Fedup could better spend their time worrying about whether they will still have a job in 2007, about whether there will be further cuts in pay and other benefits, and about whether there will even be an IBM corporation to work for; the Board of Directors surely has reasons for resolutions 3-6 on the 2006 proxy, which would allow them to dissolve the corporation and dispose of all the assets without permission from 2/3 of the shareholders. Janet Krueger, Rochester, MN.
  • Raise and Salary Comments
    • Comment 04/1/07: Salary = 172K; Band Level = 10; Job Title = Exec IT Architect' Years Service = 34; Hours/Week = 60; Div Name = GTS; Location = RTP; Message = Very happy to be leaving the blue pig for HP. They have offered me a 15K signing bonus and a base of 221K. IBM's gone downhill even for top performers. -Happy GTS Grunt-
    • Comment 04/2/07: Salary = 31,968; Band Level = 4; Job Title = BCS; Years Service = 9; Hours/Week = 40+; Message = I am so disappointed at all these people band 6+ complaining about their 40+ thousand dollar jobs. When people like me who been with the company can barely scrape 32 thousand out of the pot. I am sick of IBM their management, and the unfair pay they give for over 9 years of service. -YUM84-
    • Comment 04/3/07: Salary = 75,000 (without bonus); Band Level = 7; Job Title = IT Specialist; Years Service = 12; Hours/Week = 50-60 (plus 24x7x365 hot pager); Div Name = 07; Location = Colorado; Message = I have always been a 1 or 2+ performer, except for one year that I received a 2. I don't expect to ever receive another pay raise (unless we can get a union contract!) -SeniorButtonPusher-
    • Comment 04/4/07: Salary = 70000; Band Level = 7; Job Title = Engineer; Years Service = 2; Hours/Week = 60; Div Name = STG; Location = Hopewell Junction; Message = I know I'm only repeating what many others have said on this board..... but it's true. You can do a LOT better with opportunities outside of IBM. I joined the semiconductor division (fishkill fab) straight out of school, fresh, excited and naive. Didn't know much about IBM at the time, but the company seemed to have a good name (or at least I didn't know any better). Within 2-3 months at this place, I began wondering whether this workplace was really this bad or was it the same at all companies or if I was just whining unnecessarily.
      After I got to know my coworkers well, I found out none of them really liked being here or felt valued. Most of them were just hanging on in quiet desperation, either because they had been here for too many years and would find it difficult to move, or were stuck to mortgages, or to a high-spending wife or children's college to pay for or something like that.
      After I got 4-5 months into my job, I decided I would quit, but after 1-2 years, so it wouldn't look funny on my employment history. Enduring the time here was exhausting, causing many stress-related health problems. The management is so ruthless and cold blooded it makes you lose faith in the human species. Its only once you work here that you realise how disposable and commoditized you are. Seriously, I have never felt so worthless despite working so hard and doing fairly decent work.
      There are several layers of management that do nothing but cook up meaningless work for the underclass to do. I have rarely heard genuine appreciation either for myself or my coworkers from management. The paperwork you need to do and hoops you need to jump through to get simple HR-related things done is astounding.
      If you're not a member of the managerial clique, then you are to IBM what a chicken is to a meat company. Anyway I endured 22 months there and quit to join another semiconductor fab in europe. It is a completely different atmosphere here, I now feel valued and finally have work-life balance that I didn't even dream of. I am much more productive and actually happy to come to work. Gone is the IBM work culture of backstabbing and undermining others and unhealthy competition with your team members. Here there is camaraderie and the synergy or true teamwork.
      I wish someone had warned me in college not to join that place. If you want to do some good deed in your life, spread the word about IBM to as many as you can. Eventually, the truth will get around. Too many people join IBM just for the big-name reputation, not knowing what it really is. -doobya-
    • Comment 04/6/07: Salary = 80,000; Band Level = 8; Job Title = Staff Software Developer; Years Service = 6; Hours/Week = 40; Div Name = ADTC; Location = Toronto; Message = Left IBM to consult and make way more than I ever could staying. -Anonymous-
    • Comment 04/6/07: Salary = 151000; Band Level = 10; Job Title = Exec IT Architect; Years Service = 33; Hours/Week = 60+; Div Name = 23; Location = RTP; Message = doobya, The most important thing you can do for your alma mater and fellow colleagues is to report your IBM experience back to your college. Many college placement offices and professors have no idea of the extent of IBM's change for the worse. If every graduate that had recently joined IBM would send a letter back to their college describing their experiences at IBM, most management would have been fired, the company unionized and this terrible environment gone forever. I encourage you to write to your professors, open their eyes as well as your college placement about the truth of why IBM really stands for "Immoral Brand and Management". -Old IBMer-
  • PBC Comments
    • Comment 03/30/07: Salary = $46,500; Band Level = 4; Job Title = Hardware SSR (CE); Years Service = 6; Hours/Week = 40; Location = North Eastern USA; Message = I feel that I should be paid a lot more for what I do at IBM. Servicing large IBM accounts on many platforms (i,z,&p series) in business critical situations. I am also a team leader of about 15 people. I feel that I should be making more. And the cost of living and housing where I live is phenomenal. Hopefully this new pay plan hits me. IBM should get rid of the many employees with over 15-20 years that don't do jack and are basically useless bodies, at least in my field, then go ahead and jack up the pay at least 60%, for the rest of us that actually do all the work. -broke-
    • Comment 03/31/07: Regarding the post by broke: "IBM should get rid of the many employees with over 15-20 years that don\'t do jack and are basically useless bodies, at least in my field, then go ahead and jack up the pay at least 60%, for the rest of us that actually do all the work." IBM likes to play employees off against each other. Don't worry, they've been getting rid of plenty of employees with over 15-20 years, but if you think it's so they can turn around and give you a 60% raise then I have some swamp land in Florida to sell you. -Anonymous-
    • Comment 04/1/07:Both the naivety and arrogance of "-broke-" are breathtaking. It's so sad to see that IBM has sunk so low as to have employees like him/her. I don't blame him, though. IBM used to have high-quality employees because the culture cultivated them. "-broke-" is the type of employee Lou, and his boy Sammy, want at IBM. Hang in there,"-broke-", you appear to be IBM management material. -longGone-
    • Comment 04/1/07: Salary = 172K; Band Level = 10; Job Title = Exec IT Architect; Years Service = 34; Hours/Week = 60; Div Name = GTS; Location = RTP; Message = Very happy to be leaving the blue pig for HP. They have offered me a 15K signing bonus and a base of 221K. IBM's gone downhill even for top performers. -Happy GTS Grunt-
    • Comment 04/2/07: Salary = 31,968; Band Level = 4; Job Title = BCS; Years Service = 9; Hours/Week = 40+; Message = I am so disappointed at all these people band 6+ complaining about their 40+ thousand dollar jobs. When people like me who been with the company can barely scrape 32 thousand out of the pot. I am sick of IBM their management, and the unfair pay they give for over 9 years of service. -YUM84-
    • Comment 04/3/07: Salary = 75,000 (without bonus); Band Level = 7; Job Title = IT Specialist; Years Service = 12; Hours/Week = 50-60 (plus 24x7x365 hot pager); Div Name = 07; Location = Colorado; Message = I have always been a 1 or 2+ performer, except for one year that I received a 2. I don't expect to ever receive another pay raise (unless we can get a union contract!) -SeniorButtonPusher-
    • Comment 04/3/07: I can't help but ask; with so many IBMer's making over six figures as part of regular salary bands, what does the CWA think it can offer (and at a price) that they don't already have? -ReallyWantaUnion- Alliance reply: A contract, a voice in the workplace, representation of workers, an alternative to management control over everything. Go here to view http://www.allianceibm.org/professworkerunions.htm
    • Comment 04/4/07: Salary = 70000; Band Level = 7; Job Title = Engineer; Years Service = 2; Hours/Week = 60; Div Name = STG; Location = Hopewell Junction; Message = I know I'm only repeating what many others have said on this board..... but it's true. You can do a LOT better with opportunities outside of IBM. I joined the semiconductor division (fishkill fab) straight out of school, fresh, excited and naive. Didn't know much about IBM at the time, but the company seemed to have a good name (or at least I didn't know any better). Within 2-3 months at this place, I began wondering whether this workplace was really this bad or was it the same at all companies or if I was just whining unnecessarily. After I got to know my coworkers well, I found out none of them really liked being here or felt valued.
      Most of them were just hanging on in quiet desperation, either because they had been here for too many years and would find it difficult to move, or were stuck to mortgages, or to a high-spending wife or children's college to pay for or something like that.
      After I got 4-5 months into my job, I decided I would quit, but after 1-2 years, so it wouldn't look funny on my employment history. Enduring the time here was exhausting, causing many stress-related health problems. The management is so ruthless and cold blooded it makes you lose faith in the human species. Its only once you work here that you realise how disposable and commoditized you are. Seriously, I have never felt so worthless despite working so hard and doing fairly decent work.
      There are several layers of management that do nothing but cook up meaningless work for the underclass to do. I have rarely heard genuine appreciation either for myself or my coworkers from management. The paperwork you need to do and hoops you need to jump through to get simple HR-related things done is astounding. HR If you're not a member of the managerial clique, then you are to IBM what a chicken is to a meat company.
      Anyway I endured 22 months there and quit to join another semiconductor fab in europe. It is a completely different atmosphere here, I now feel valued and finally have work-life balance that I didn't even dream of. I am much more productive and actually happy to come to work. Gone is the IBM work culture of backstabbing and undermining others and unhealthy competition with your team members. Here there is camaraderie and the synergy or true teamwork. I wish someone had warned me in college not to join that place. If you want to do some good deed in your life, spread the word about IBM to as many as you can. Eventually, the truth will get around. Too many people join IBM just for the big-name reputation, not knowing what it really is. -doobya-
    • Comment 04/6/07: Salary = 80,000; Band Level = 8; Job Title = Staff Software Developer; Years Service = 6; Hours/Week = 40; Div Name = ADTC; Location = Toronto; Message = Left IBM to consult and make way more than I ever could staying. -Anonymous-
    • Comment 04/6/07: Salary = 151000; Band Level = 10; Job Title = Exec IT Architect; Years Service = 33; Hours/Week = 60+; Div Name = 23; Location = RTP; Message = doobya, The most important thing you can do for your alma mater and fellow colleagues is to report your IBM experience back to your college. Many college placement offices and professors have no idea of the extent of IBM's change for the worse. If every graduate that had recently joined IBM would send a letter back to their college describing their experiences at IBM, most management would have been fired, the company unionized and this terrible environment gone forever. I encourage you to write to your professors, open their eyes as well as your college placement about the truth of why IBM really stands for "Immoral Brand and Management". -Old IBMer
    • Comment 04/8/07: Salary = 130K; Band Level = 8; Job Title = Advisory Engineer; Years Service = 27; Hours/Week = 40-50; Message = I'm happy that IBM has not been unionized, and happy that it looks like it will stay that way. Unions have contributed to the employment problems in other industries like steel, airlines and now auto manufacturing. Unions have become little more than organizations protecting those who can't hold a job on their own. -Mike- -
    • Comment 04/10/07: Hey Mike: Based on your current salary and band you better watch your back since anyone close to the top of band salary could easily be a prime candidate for the next "30 day march"! IBM can easily hire someone(s) to do you job at well less than you are making! You might not like unions but without one what job protection do you really have in IBM? -Anonymous-
    • Comment 04/11/07: Salary = $105K + perf bonus (~$5K this year); Band Level = 8; Job Title = Service Delivery Manager/Project Manager; Years Service = 6; Hours/Week = 55; Div Name = IGS; Location = Not provided to protect the guilty; Message = Can't believe how this company has regressed in benefits, bonus pay, people care, management philosophy and plain old common sense in the past 6 years. IBM's lousy deal crafters have made this job and company into a hellhole from which we may never recover. Considering moving outside IBM, but too tired and burned out to even do that. -Anonymous-
    • Comment 04/13/07: In 2007, anyone in job family 09A (exempt professional) WILL NOT be eligible for a raise. Only 1 performers are guaranteed a raise (if they are not in the job family 09A). Even 2+ are not guaranteed a raise... forget it if you're a 2 performer. -Anonymous-
    • Comment 04/13/07: Salary = $103,500; Band Level = 8; Job Title = Project Manager/Delivery Manager; Years Service = 8; Hours/Week = 40+; Div Name = GBS; Location = Toronto, Canada; Message = Same stuff happening north of the border too. Not many raises or promotions going around in Canada. Typically only 2+ or 1 get raises and bonuses are limited to. Morale sucks. People work hard as dogs but rarely get a heart felt thank you from their management. I see it day in and day out. It is becoming really disheartening. IBM sure does not walk the talk..... work / life balance...what's that? -Anonymous-

Vault Message Board Posts

Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. A few sample posts follow:

  • "And now the Economist weighs in..." by "wonderaboutibm". Full excerpt: http://www.economist.com/business/displaystory.cfm?story_id=8956676. Well, a bit turgid on the IBM India connection, but there appears to be significant agreement with us board negativists.
  • "and the surprise message in the article is..." by "GTS Grunt". Full excerpt: The blue pig is rumored up for sale!" (Though, if rumours are to be believed, a record-breaking bid from private equity may yet rescue Mr Palmisano's reputation.) The Economist is not a magazine that would make that kind of statement unless there's real smoke coming from that fire!
  • "Look at it this way" by "Dose of Reality". Full excerpt: The current power structure has been milking, or shall I say cashing out, the embedded value for a decade with a three-headed strategy of faking out shareholders, employees, and clients alike.
    As I have been saying for almost four years, this will eventually run its course leaving them nowhere else to hide. The negative ramifications of screwing these three constituents is always on a 9-12 month lag, so the exploitation ideas will run out before we hit bottom financially.
    The only thing left is for them to sell out for one final big score, because there is no way for them to manage out of this mess, even if they wanted to. A frame-breaker is the only way out.
  • "On second thought..." by "wonderaboutibm". Full excerpt: The fact that the Economist makes such a statement is not as remarkable as it sounds at first. There has been recent speculation on 100+ billion private-equity deals, and that is getting close to IBM's market capitalization.
    The really interesting aspects, though, lie in some of the implications. Just think of it: the big PE money is in gaining from 'market inefficiencies' -- somehow extracting value that the agency corporate management either could not or would not realize for the original shareholders. If we hear of a 5 billion buyout that is returned to public ownership a couple years later for 10 billion -- that's a fat-boy tax on the rest of us. If IBM is in play, the big boys think there is value not currently realized in the organization. Or maybe there is financial value not currently acknowledged in the organization, to be reserved for the potential financial benefit of only the self-chosen few who team of with the PE types.
  • "A Success Story" by "BigBlueBeast". Full excerpt: I used to be an avid reader and sometimes poster here. I was very unhappy as an IBMer, but wanted to share some good news. I left BCS in early 05 after 5 years with PwC and IBM out of college, making 55k as a band 7. I joined another large consulting firm, as a senior consultant at 84k. I am now making another move, still within the big 4, as a manager at 120k.
    It's really unbelievable to me that I have more than doubled my salary in 2 years. I always knew that IBM underpaid me, but in retrospect, I was totally taken for a ride.
    The punch line to this story is that IBM called and recruited me to come back recently. I was very clear on my current salary and requirements, and I decided to go through the process with them. IBM me an offer to rejoin as a band 8 - at 70k, despite our prior discussions, and would not budge due to my prior salary history at IBM. Thanks for the laugh IBM - it was a great reminder of how much I don't miss Big Blue!


   
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